Thursday, May 20, 2010

Two on trade

From a review Doomsayers Beware, a Bright Future Beckonsof Matt Ridley's new book 'The Rational Optimist' (via 3quarksdaily):"“At some point,” Dr. Ridley writes, “after millions of years of indulging in reciprocal back-scratching of gradually increasing intensity, one species, and one alone, stumbled upon an entirely different trick. Adam gave Oz an object in exchange for a different object.”

The evidence for this trick is in perforated seashells from more than 80,000 years ago that ended up far from the nearest coast, an indication that inlanders were bartering to get ornamental seashells from coastal dwellers. Unlike the contemporary Neanderthals, who apparently relied just on local resources, those modern humans could shop for imports.

“The extraordinary promise of this event was that Adam potentially now had access to objects he did not know how to make or find; and so did Oz,” Dr. Ridley writes. People traded goods, services and, most important, knowledge, creating a collective intelligence: “Ten individuals could know between them ten things, while each understanding one.”

As they specialized and exchanged, humans learned how to domesticate crops and animals and sell food to passing merchants. Traders congregated in the first cities and built ships that spread goods and ideas around the world."More at Matt Ridley's blog.

From the conclusion of Economic Integration and Political Disintegration: " A consequence of this paper is that as the process of economic 'globalization' will progress, political separatism will continue to be alive and well. The concept of relatively large and centralized nation-states, will be more and more threatened by regional separatism from below, and the growth of supranational institutions from above, in a world of 'global' markets."